Huawei orchestrates China’s push for homegrown chipmaking tools

Huawei is serving as the coordinator and chief investor behind China's most ambitious effort to develop homegrown lithography equipment, acting as what one analyst called a "project manager" for the country's push to break its dependence on ASML ↗ 1.67% and Western semiconductor toolmakers.

The Financial Times reported on September 7 that Huawei is investing across the lithography supply chain while brokering deals to get domestically made tools into Chinese fabs, including SMIC Semiconductor Manufacturing International Corporation. The effort centers on deep ultraviolet lithography, or DUV — the technology class one step below the cutting-edge extreme ultraviolet systems that remain under tight export controls.x+1

Yuliangsheng and the 12-Machine Target

At the heart of the program is Yuliangsheng, a Shanghai-based equipment maker spun out of SiCarrier, a startup the Financial Times has previously reported has close technical and business ties to Huawei. The company has co-developed China's first advanced DUV machine, which is now being tested on SMIC's and Huawei's own production lines.thenextweb+3

Yuliangsheng expects to produce 12 DUV machines by the end of 2026, according to the Financial Times. SMIC is evaluating the company's 28-nanometer tool and pairing it with multi-patterning techniques to reach 7-nanometer-class chip production.chaincatcher+3

Lin Qingyuan, a semiconductor analyst at Bernstein, described Huawei's function to the Financial Times: "Huawei is playing a project management role in China's DUV push." A prototype on its own achieves nothing, he added — "a central orchestrating power" is needed to bring thousands of vendors and customers together.thenextweb

Critical Dependencies Remain

The machines are not yet fully domestic. Yuliangsheng's projection lenses still come from Zeiss Carl Zeiss Meditec AG ↘ 0.56%, which says it sells lithography optics only to ASML. Industry insiders told the Financial Times the lenses could be obtained on the secondary market in China. Huawei's venture arm Habo has invested in Fujian Zhiqi Photonics, an ultra-precision optics firm, to develop a replacement.huaweicentral+1

High-power light sources present a second bottleneck. Japan's Gigaphoton and ASML-owned Cymer dominate that market. Huawei has backed Beijing RSLaser Opto-Electronics to build a domestic alternative.thenextweb+1

The Wider EUV Gap

Even as DUV efforts accelerate, the distance to EUV capability remains vast. Frank Rohmund, CEO of ZEISS Semiconductor Manufacturing Technology, told Bloomberg at the SEMICON conference in Taiwan that a 15-year gap between China and the established EUV ecosystem was a "probably reasonable assumption." A UBS analysis placed Chinese EUV development at roughly where ASML stood in 2004.businesstimes+2

Lin cautioned that domestic DUV machines will take several years to approach ASML's productivity. Chinese fabs are testing local tools but still run production on ASML equipment, which accounts for roughly a fifth of the Dutch company's revenue this year. Lin added that U.S. restrictions could paradoxically accelerate China's progress by pushing local fabs toward local suppliers: "If the restrictions push local fabs to collaborate with local DUV suppliers, they could increase their technological capabilities much faster than expected."thenextweb